Economy shows positive sign

Our View

When you, your friends and neighbors are struggling with job loss, high gas prices and disappearing forms of assistance, seeing a silver lining is asking of you an awful lot.

The local people who came in droves to the recent Project Connect certainly must see little signs of improvement in the economic world around them.

But if we all look closely enough, there are reasons to be hopeful, at least in the "big picture" view.

Politicians would use the phrase "cautiously optimistic" to describe gains in Michigan's economic status. Indeed, our state remains on such fragile, delicate footing that even any minor disruption could push us down again -- gas prices particularly come to mind.

What are those optimistic signs? For one, new industry, even here in Northern Michigan, an example being Precision Edge in Boyne City. The new factory in Boyne City's industrial park ramped up production of surgical tools in recent weeks in a newly constructed 38,500-square-foot building. The company invested about $6 million in the facility and employs 14 people -- 10 on an hourly basis and four salaried -- at the new plant. It plans to bring additional production to the plant this summer -- with three to four jobs to be added by that time.

Not hundreds of jobs. Little by little, inch by inch.

A recent Associated Press story reported Michigan has regained more than 151,000 jobs since the number of working residents fell to a recession low in mid-2009. The state unemployment rate dropped from a peak of 14.2 percent in August 2009 to 9 percent in January, then to 8.8 percent in February -- the seventh consecutive month of improvement.

That is good news -- but not great news.

Rick Waclawek, director of the state Bureau of Labor Market Information and Strategic Initiatives, points out that the drop puts Michigan within striking distance of the national average of 8.3 percent. February's seasonally adjusted rate was the lowest since August 2008, when Michigan had an 8.5 percent rate right.

That was before the U.S. and world economy got knocked to its knees. Michigan was hurting a lot longer than that. In our state, 857,000 jobs were lost between the April 2000 employment peak -- when the jobless rate was 3.4 percent -- to the 2009 low point. As of January 2012, more than 700,000 of those jobs remained lost, AP reports.

University of Michigan economist George Fulton forecasts Michigan will add about 26,000 net jobs this year and 28,500 in 2013 before seeing greater growth of 46,800 jobs in 2014. That's slower than the net 63,500 jobs the state added in 2011, but Fulton said it's still reason for optimism, AP reports.

There is some good news in the all-important housing industry. Nationally the number of Americans who signed contracts to buy U.S. homes fell a slight 0.5 percent in February to a reading of 96.5, the National Association of Realtors said recently. But January's reading of 97 was the highest since April 2010. A reading of 100 is considered healthy. Economists expect sales to increase between March and June.

Then there is manufacturing. While some political conservatives purpled with rage over the 2008-2009 automobile industry bailout, Michigan's auto industry is alive because of it. AP reports that General Motors Co. and Chrysler Group have shown steady gains since they both emerged from bankruptcies in 2009. In 2010, AP reports, Michigan added more manufacturing jobs than it lost -- the first time since 1999. GM even took back the title of the world's No. 1 automaker from Toyota Motor Co.

No, it's not all roses. Michigan has a balanced budget and even a $457 million surplus, but much of the savings came from hacking school spending. That means cuts at the local level, and fewer good-paying teaching jobs.

So, it's slow going -- and not always going in a positive direction. But we must recognize that all is not doom and gloom. There are bright spots, proverbial lights at the end of this dour economy tunnel.